If the markets follow the Friday’s global cues, the BSE Sensex and the S&P CNX Nifty are likely to open in the red. The Dow Jones was down 281 points on Friday, while Germany’s Dax and Britain’s FTSE-100 declined by around 100 points each.

Market observers indicate that the sub-prime issue may intensify further in the near term. So time alone will tell where the Indian markets are heading. The first support, in case of a bear hug, will be around 4,345, which has been the 50-day moving average for the Nifty.

In the last two weeks, the Sensex and the Nifty have lost almost 6 per cent, and hence analysts do not foresee a major selloff in the market. There will be consolidation for a while and the Sensex and the Nifty will trade in a range-bound manner.

Zeal Mehta, a derivative analyst with Emkay Shares, said the current fall in the markets was a correction of the rally witnessed over the past couple of months, and that the overall trend was still bullish. The Nifty PCR (OI) remained at the comfortable level of close to 1.42.

The high implied volatility of the Nifty close to the 24-26 per cent levels suggests that the markets may continue to remain volatile and thus traders should maintain appropriate stop-losses on their positions.

The Nifty support range between 4,300 and 4,350 can be expected to offer strong support in the coming days. Resistance is seen close to 4500.